Blog Post

Will YouTube’s Viacom Win Open the Floodgates for More Premium Content?

YouTube’s (s GOOG) win in the $1 billion lawsuit that was brought against it by Viacom (s VIA) could not only help clear it of the copyright infringement stigma that it has held since the early days of its operations, but it could pave the way for the video share site to sign up more premium content partners.

YouTube already has the size, reach and audience that content partners — and advertisers — are looking for to capture viewer eyeballs; according to comScore, the site takes more than a 40 percent share of the total US online video market each month. But what YouTube doesn’t have a lot of is premium, long-form videos to serve those ads against.

The company has managed to strike some deals with traditional TV programmers and movie studios for full-length content, mostly for older TV content or independent films. On the TV side, that includes old CBS shows like Beverly Hills 90210, MacGyver and Star Trek: The Original Series. So far, though, it hasn’t been able to attract the kind of high-demand, first-run content that is found on competitor Hulu, which is currently ranked as the No. 2 video site in the US.

Now that it was found not to infringe on Viacom’s copyright, that could soon change, as content providers may warm up to the idea of streaming videos on YouTube. In fact, one media executive, who asked not to be named, said the decision could “open up the floodgates” for YouTube to bring on more premium TV and movie content.

If YouTube finds a way to get better content on board, it could leverage its already sizable audience to bring in more ad dollars, which could beget even better content, which could beget more viewers, which could beget more ad dollars, and so on. The big loser in that scenario, of course, would be Hulu, which has so far been the only site outside of the networks’ own websites to carry many prime time shows.

Related content on GigaOM Pro: New Business Models For Pay TV Services (subscription required)

18 Responses to “Will YouTube’s Viacom Win Open the Floodgates for More Premium Content?”

  1. “Back to my original question – how is this ruling going to open the flood gates for Professional creators of content when they are not really part of the equation?”

    No clue. I don’t see it either. Perhaps Ryan can enlighten us on that point.

  2. timekeeper

    Again, you are right Scott. The name should be changed to – or something like that. We then build a “community” of sharers, hosting their personal videos and any other video content they might upload. We have to make sure and take act upon take down notices immediately when we receive them. We run pre-rolls, in-line, banners and skyscrapers on every piece of content though. We’ve got to make money somehow…

    I’m I getting closer to a legit business?

      • timekeeper

        Funny thing is… I also removed the content rights holders from the business equation. For UGC that’s not much of an issue as sharing and notoriety is their motivation. For professional creators, being part of the value chain is critical.

        Back to my original question – how is this ruling going to open the flood gates for Professional creators of content when they are not really part of the equation?

  3. Timekeeper,

    And YouTube has responded in a swift and decisive manner when copyright holders complain. Within one day of being so informed, YouTube will take down the offending material. That is very quick and decisive.

    As for the website you suggest, its very nature is about violating copyrights. “only host new movies that make it to DVD as they are released” You then mentioning doing this without securing permission from the copyright holders. If you’re trying to imply that YouTube is doing that, such an analogy would be wrong as YouTube isn’t doing that.

    • timekeeper

      Let’s just call it – members can upload what ever they want. If they decide to put up copyrighted material we can’t stop that. Take down notices will be actioned upon, within one day, if and when they come in.

      We will run ads, though, in order to generate revenue to cover the cost of distributing our member’s videos.

      Still legal though, right?

      • No, by merely your URL name you’re making it clear what you’re doing and that it is to violate copyrights.

        Again, if you’re trying to use this as an analogy for YouTube, you’re way off the mark. YouTube was created as a way for users to share their videos and that’s what the vast VAST majority of all videos on YouTube are. The most popular video clips of all time on YouTube weren’t produced by Hollywood but by average people. A toddler having his finger bit upon twice by his baby sibling and a guy giving a comical history of dance are the top YouTube videos of all time.

        I know you’re trying to make a point about YouTube but you’re failing to do so. You’re just making strawman arguments ( whose flaws are easy to spot out.

  4. timekeeper

    I’m lost… How does a judge’s ruling open the floodgates for premium content? It is the rights holders who are still stinging from YouTube stealing their content in the first place. Why would they now put it on YouTube?

    So far, this has truly been a case of asking forgiveness instead of permission.

    • Please point out ONE instance where YouTube STOLE anyone’s content. That others use YouTube to distribute content that they do not hold the copyrights to isn’t the same thing as YouTube stealing it. That’s like holding a city responsible because burglars used their roads when committing a crime.

      And it isn’t asking for forgiveness or permission. It is acknowledging that community sites cannot be held responsible for what their members do. That’s it. When YouTube has been informed of copyright violations, they removed the violating material within ONE day. That shows they’re not encouraging or allowing copyright violations. However, it is the copyright holder’s responsibility to make YouTube aware of these violations and provide proof that they do hold the copyrights to the material in question and didn’t give the user permission to use their stuff.

      • timekeeper

        Well, I guess when you put it that way Scott, you’re right. No one holds the city responsible for burglars using the road to get to and from a crime yet we do hold the city’s police force responsible to respond to the act in a swift and decisive manner.

        Why can’t someone start up a site called, say –, and only host new movies that make it to DVD as they are released – the zero day? Movies are uploaded by members and DMCA take downs will be processed as received. Run some pre-roll adds, banners and towers along side them and make some Google ad bucks. All the while hiding behind the shield of the DMCA. Get a huge user base and sell the whole thing to Google – I mean Viacom for $2b. It should work and be 100% legal, right?

  5. While this ruling takes away a problem for YouTube, the biggest problem still remains and it is the same one faced by p2p networks. Developing a profitable business model for content providers to run their “TV” shows on YouTube. This is something that Google/YouTube should be focusing all of its efforts on. If they can crack this problem, the floodgates really open and the old networks will be truly threaten for the first time. And I am not talking about Google giving all the money to content providers but enabling them to develop profitable relationships with advertisers of all sizes on their own with the goal of them then running their shows on YouTube.

    I have proposed one such business model (click on my name) but there can be others that might work better. Perhaps a bidding system (eBay like) where content providers put their future shows up for bid and where advertisers bid to get their ads inserted into them, get their product a product placement, or buying the full or partial sponsorship of a show.

    Right now, YouTube seems to be project the Hollywood fantasy mindset of “if you build it, they will come.” Instead, they need to get off their lazy behinds and develop a viable flexible profitable business model for content providers.

  6. Hi Ryan,

    I wonder, following that loop argument, what if Hulu, as an independent business, was to then partner with companies such as MetaCafe, Myspace, etc. to do in reverse what Youtube did, i.e. leverage the userbase of UGC to introduce premium content/ad-inventory?

    Also, I’d still be surprised if this ruling really was a done deal, rather than Youtube wishfully declaring its hopes to the media as fact, as happened the last time the Chief Council posted a blog post.

    Kind regards,

    Shakir Razak

  7. Josh Jones

    Viacom is appealing the ruling in the Court of Appeals (2nd Circuit). YouTube/Google are massive copyright infringers and the law will be re-interpreted. Stanton is incorrect. YouTube does not remove copyrighted content quickly.

    • YouTube is a community site. When has it EVER infringed on any copyrights? That YouTube’s users might doesn’t mean that YouTube is as guilty as they are. See my road analogy to Timekeeper for why.

      And you state that YouTube does not remove copyrighted content quickly. Where’s your proof? Please give a link to an unbiased source that backs up your statement.